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Measurement in Economics

HANDBOOK OF THE PHILOSOPHY OF ECONOMICS, U Mäki, ed., Elsevier, Forthcoming

41 Pages Posted: 18 Jul 2009  

Marcel J. Boumans

Utrecht University School of Economics

Date Written: July 14, 2009

Abstract

The Representational Theory of Measurement conceives measurement as establishing homomorphisms from empirical relational structures into numerical relation structures, called models. There are two different approaches to deal with the justification of a model: an axiomatic and an empirical approach. The axiomatic approach verifies whether a given relational structure satisfies certain axioms to secure homomorphic mapping. The empirical approach conceives models to function as measuring instruments by transferring observations of an economic system into quantitative facts about that system. These facts are evaluated by their accuracy and precision. Precision is achieved by least squares methods and accuracy by calibration. For calibration standards are needed. Then two strategies can be distinguished. One aims at estimating the invariant (structural) equations of the system. The other strategy is to use known stable facts about the system to adjust the model parameters. For this strategy, the requirement of models as homomorphic mappings has been dropped.

Keywords: calibration, error, instrument, model, precision, scale, standard

JEL Classification: B4

Suggested Citation

Boumans, Marcel J., Measurement in Economics (July 14, 2009). HANDBOOK OF THE PHILOSOPHY OF ECONOMICS, U Mäki, ed., Elsevier, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1433818

Marcel Boumans (Contact Author)

Utrecht University School of Economics ( email )

Kriekenpitplein 21-22
Adam Smith Building
Utrecht, +31 30 253 7373 3584 EC
Netherlands
+31 30 253 6287 (Phone)

HOME PAGE: http://www.uu.nl/leg/staff/MJBoumans

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